India downgrade not on the cards, says Moody's

An India downgrade is not on the cards, Bloomberg reported, citing Moody's rating analyst Thomas Byrne.

Moody's has an investment grade rating of Baa3 on India with a stable outlook.

In December, Moody's had said economic growth rate in India remains weak and there is little chance of recovery next year.

"Complicated taxes and regulations, weak infrastructure, and a weak central government weigh on confidence and demand. This will turn around eventually, but not in 2014, keeping GDP growth rate in India below potential," Moody's had said in a report.

 India downgrade not on the cards, says Moodys

Reuters

The May elections open possibility of better governance, it said.

The global rating agency had also earlier cautioned that low growth and high inflation could weaken the country's debt profile and raise financing cost.

"If current lower growth and high inflation persist over the medium term, the domestic financial system's capacity to absorb government debt could fall quite considerably," Moody's had said in a report.

This could change the structure of government debt, raise debt financing costs and weaken government debt ratios. Such a development is not Moody's base case forecast at this time, but a risk that the agency is monitoring, it had said.

Reuters

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Updated Date: Dec 21, 2014 02:56:06 IST